Are You Ready to be a Property Developer?
Property development has been a great money-spinner for many New Zealanders – buying a property with potential, adding value with renovations and redecorating and then selling it on for profit. But with the property market uncertain and banks less willing to give out loans, how do you if you’re got what it takes to be a property developer?
First of all, you need to be able to look at your investment property as a business venture. Too many people fall into the trap of buying an investment property and doing it up to fit their tastes, then finding it isn’t worth as much as they think it is, or worse, that it won’t sell at all.
You have to separate your personality from the home because, as much as you may like a certain feature, you are not the person who will be living in the house. You need to look for ways to add value for as little upfront cost.
For example, an easy way to add value is to add space. In the property market, every square metre of space has a certain dollar value – more space = more dollars. But beware; adding extra rooms can end up costing more than those rooms give you in value. This is usually the case when adding a second story.
To be a successful property developer you need to study your market. This means knowing the type of houses that sell in your price range in your area and what details perspective buyers are looking for. Do you know at what point you need to install a second bathroom? How many bedrooms is enough? What size garage should you have? Are two-storey homes more popular than one-storey?
Being a successful property developer means thinking about your investment property as an investment. It’s not your dream home, but could be your ticket to financial freedom.